Wednesday, December 31, 2008
The Fourth Circuit recently issued an interesting decision on the LMRA's prohibition under against employers giving anything of value to a union (Section 302). In Adcock v. Freightliner, the court rejected the argument of employees (represented by the Right to Work Foundation) that a card check agreement between an employer and union violated Section 302. According to the court:
The issue presented in this appeal is whether Freightliner LLC (Freightliner) delivered "money or other thing[s] of value" to the International Union, United Automobile and Agricultural Implement Workers of America (the Union) pursuant to a card check agreement with the Union, wherein Freightliner agreed, among other things, to: (1) require some of its employees to attend, on paid company time, Union presentations explaining the card check agreement; (2) provide the Union reasonable access to nonwork areas in company plants to allow Union representatives to meet with employees; and (3) refrain from making negative comments about the Union during organizing campaigns. . . . As the Employees’ argument goes, because these concessions made by Freightliner benefited the Union’s organizing efforts, they were "thing[s] of value" under § 302, because a "thing of value" means anything that has subjective value to the Union. . . .
Under the plain language of the statute, the concessions made by Freightliner in the Card Check Agreement do not involve the payment or delivery of a "thing of value." The concessions provided by Freightliner all involve permitting the Union access to employees during an organizing campaign. Such concessions do not involve the delivery of either tangible or intangible items to the Union. . . .
Our reading of the statute is consistent with the purposes of § 302. . . . [Section] 302 is aimed at preventing "bribery, extortion and other corrupt practices conducted in secret." In this case, the concessions made by Freightliner do not involve bribery or other corrupt practices.
Our interpretation of the phrase "thing of value" also is buttressed by § 302’s penalty provision. Under § 302’s penalty provision, the severity of the sentence is dictated by the monetary value of the thing delivered by the employer or received by the union. A person who willfully violates § 302 is guilty of a felony unless the value of the money or thing involved does not exceed $1,000, in which case the person is guilty of a misdemeanor. Thus, Congress clearly intended § 302’s "thing of value" to have at least some ascertainable value. In this case, unquestionably, the concessions made by Freightliner, which simply involved allowing the Union access to Freightliner’s employees, have no such whatsoever.
I haven't looked at this issue in detail, but it's my sense that this decision is in line with other interpretations of Section 301. Perhaps we'll hear an opposing view from some of our RTWF readers.
As a sign that the political machinations surrounding EFCA has reached a fever pitch, we now have news of a recent initiative to place a secret ballot amendment in various state constitutions. And yes, I'm thinking what you're thinking--could you possibly have a clearer case of NLRA preemption? From the Atlanta Journal-Constitution:
A new business-backed coalition is targeting at least five states in an attempt to require all union elections be conducted by secret ballot. The group, called Save Our Secret Ballot, is proposing a 47-word amendment to state constitutions that reads, in part, "the right of individuals to vote by secret ballot shall be guaranteed." The coalition argues that such secrecy is necessary to protect against union intimidation.
The group plans initiative efforts in Arizona, Arkansas and Missouri and will work through legislatures to refer similar measures to the ballot in Nevada and Utah. The initiative was being launched Tuesday [in Georgia]. Additional states could be added to the campaign in coming weeks, said Tim Mooney, a Scottsdale, Ariz.-based political consultant who is one of the directors of Save Our Secret Ballot. . . .
Mooney declined to identify specific financial contributors to Save our Secret Ballots, saying generally that the group was backed by small businesses and entrepreneurs. Its advisory board includes members from the conservative Heritage Foundation, Goldwater Institute and Americans for Tax Reform.
To the extent that this initiative is targeting union elections, it is without a doubt more of a PR move than anything else. Although it could have teeth under state labor laws (to the extent they exist), it is a waste of ink in the private sector. The NLRB's jurisdiction over representational issues in the private sector is given more deference than anything else the Board does, and NLRA preemption clearly applies. But the initiative is obviously more about the political battle over EFCA, and I have little doubt that it will not be the last of its kind.
Hat Tip: Barry Hirsch & Dennis Walsh
Tuesday, December 30, 2008
- David C. Yamada, Workplace Bullying and Ethical Leadership (508).
- Anup K. Basu, Alistair Byrne, & Michael E. Drew, Dynamic Lifecycle Strategies for Target Date Retirement Funds (156).
- Francine J. Lipman, The Undocumented Immigrant Tax (136).
- David C. Yamada, Human Dignity and American Employment Law (115).
- Edward A. Zelinsky, Employer Mandates and ERISA Preemption: A Critique of Golden Gate Restaurant Association v. San Francisco (102).
- David J. Doorey, Union Access to Workers During Union Organizing Campaigns: A New Look through the Lens of Health Services (96).
- Katherine Van Wezel Stone, John R. Commons and the Origins of Legal Realism; or, the Other Tragedy of the Commons (94).
- Gaobo Pang & Mark J. Warshawshy, Comparing Strategies for Retirement Wealth Management: Mutual Funds and Annuities (84).
- Brian D. Galle (photo above), Do Hidden Taxes Increase Welfare? (73).
- Simon Deakin, Legal Origin, Juridical Form, and Industrialisation in Historical Perspective: The Case of the Employment Contract and the Joint-Stock Company (72).
Monday, December 29, 2008
Rick Hills (NYU), one of the more thought-provoking and provocative thinkers over at PrawfsBlawg, has an interesting post on the interaction between the democratic process and the law of ERISA preemption.
His post takes off from the recent ERISA preemption case of Golden Gate Restaurant Association in which the 9th Circuit recently held that a San Francisco ordinance demanding employers provide health benefits is not preempted by ERISA. This holding is contrary to many of the cases in this area (and critiqued by ERISA luminaries like Ed Zelinsky) and the case is currently being considered for en banc review.
Here's a taste of Rick's insights:
San Francisco is now locked in a struggle with business over whether subnational governments can mandate that employers provide their employees with health care benefits. The employers are claiming that ERISA preempts the mandate, and their argument illustrates the insidiously anti-democratic nature of preemption arguments. As a matter of policy, I tend to agree that funding public benefits like health care through mandates on employers is foolish. Such a finance mechanism interferes with the mobility of labor and discourages job creation. Far better, it seems to me, to provide health benefits through general taxes not incident on employment.
But here is where I am a die-hard lover of federalism: As dumb as employer mandates are, centralizing debate over health care through a broad construction of ERISA preemption is even dumber. Such centralization is an outrage against the democratic process both locally (by suppressing the efforts of those zany San Franciscans) and nationally (by letting Congress off the hook of confronting the relationship between health care and employment). San Francisco hurts no one but itself and its own residents by burdening business and driving away capital to the 'burbs. The claim that national businesses will suffer some external cost outside San Francisco from disuniform regulation is patently baloney: Any business that operates in any city already must uncontroversially incur the costs of researching and complying with local zoning codes, local taxes and fees, local building codes, local safety regulations, etc. The marginal cost of insuring that one's local branch complies with the local complying health care law is close to zero . . . .
For those who care about ERISA, why do I claim that preempting San Francisco's ordinance is madness? The Restaurant Association is essentially making an effects-based preemption argument, asserting that SF's ordinance effectively requires employers to change their ERISA benefits plans to comply with San Francisco law. The folly of this argument, however, is that it proves too much: Lots of local laws might have effects on employers' incentives to provide contractual benefits. Medical malpractice lawsuits under state tort law might drive up the cost of insurance, leading the marginal employer to reduce employees' health care benefits. Local zoning law could -- indeed, does -- increase housing costs, which increases the relative attractiveness of housing benefits to employers. But no lawyer in their right mind would argue that these state and local laws "relate to" ERISA benefits plan, because these laws' obligations are not triggered by the existence of ERISA-covered employment benefits . . . .
Any other theory will draw the courts into a theory of preemption that could suck every state and local regulation of business into the maw of ERISA preemption -- an outcome utterly unintended by anyone in Congress in the 1970s, when ERISA was enacted. For courts to create such centralization without Congress' assent is, as I noted above, an outrage against common sense and subnational democracy. As I have argued elsewhere (Against Preemption: How Federalism Can Improve the Federal Legislative Process, 82 N.Y.U. L. Rev. 1 (2007)), ERISA preemption has also absolved Congress of the duty to confront the problem of how health care benefits relate to employment. Preemption, in short, destroys both subnational and national democracy . . . .
Although I have not agreed with Rick on other topics like the manner in which public pensions have contributed to NYC's fiscal crisis, I think he is right on here. From a more, technical ERISA standpoint, I wrote on the 9th Cir. opinion back in October:
I am now persuaded that the 9th Circuit's ruling [in Golden Gate] is consistent with the Travelers precedent from 1995 that unless a law is historically a matter of local concern, there should be a presumption against finding ERISA preemption. It seems to me that courts have read ERISA incorrectly in this regard in past cases.
My epiphany came in writing my new paper on the intersectionality of ERISA preemption and remedial provisions. In order for many plaintiffs not to be deprived of the remedy that they deserve, the preemption provision must be strictly construed according to the language in Travelers. This reading will ensure that defendant employers are not able to inappropriately use ERISA as a shield against meaningful health care reform or appropriate types of relief in ERISA cases.
Rick argues for a more limited ERISA preemption doctrine based on federalism principles and I argue for the same limiited doctrine based on the employee-oriented, remedial nature of the statute, but we come out in the same place. I am with Rick that I hope the en banc 9th Cir, understands the compelling arguments that abound to allow local municipalities to democratically decide what responsibilities employers in their jurisdictions have for providing their employees with health care benefits.
My thought is that if we allow federalism to flourish in this context, many jurisdictions will force Congress' hands to reconsider how to protect benefits for employees under ERISA.
Ross Runkel's Employment Law Memo has this fascinating decision from the 5th Circuit Court of Appeals, finding that an employer’s Rule 68 offer of judgment to a class plaintiff in a Fair Labor Standards Act (FLSA) wage and hour case may have acted to moot a potential collective action.
The case is Sandoz v. Cingular Wireless (5th Cir 12/23/2008). Here is some of Ross' summary of the case:
29 USC Section 216 of the FLSA provides that employees may proceed in an opt-in “collective action” analogous to a class action. The court described the primary issue on appeal as “the difficult question of when an employer can moot a purported collective action under the [FLSA] …, by paying an employee’s claim in full.” The court noted that this question involves “the complex interplay between Federal Rule of Civil Procedure 68, which stipulates how a defendant can make an offer of judgment that would fully satisfy a plaintiff’s claim, and the FLSA’s provision for collective actions under Section 216(b) [of the FLSA].” . . . .
In Cameron-Grant v. Maxim Healthcare Servs., Inc., 347 F.3d 1240 (11th Cir 2003), the 11th Circuit concluded that the FLSA’s opt-in requirements for FLSA collective actions “prohibit what precisely is advanced under Rule 23 – a representative plaintiff filing an action that potentially may generate liability in favor of uninvolved class members.” Based on that conclusion, the 11th Circuit held that the employer’s offer of judgment satisfying all of the named plaintiff/employee’s claims mooted the employee’s claims.
The [5th Cir.] concluded, “when [the employer] made its offer of judgment, Sandoz represented only herself, and the offer of judgment fully satisfied her individual claims.” The court observed, “[i]f our analysis stopped there, Sandoz’s case would be moot.” However, the court agreed with Sandoz’ argument that dismissal of her case in this manner “would provide an incentive for employers to use Rule 68 as a sword, ‘picking off’ representative plaintiffs and avoiding ever having to face a collective action.” The court turned to the “relation back doctrine” to avoid such a result. Applying that doctrine to this context, the court held “when a FLSA plaintiff files a timely motion for certification of a collective action, that motion relates back to the date the plaintiff filed the initial complaint, particularly when one of the defendant’s first actions is to make a Rule 68 offer of judgment. If the court ultimately grants the motion to certify, then the Rule 68 offer to the individual plaintiff would not fully satisfy the claims of everyone in the collective action: if the court denies the motion to certify, then the Rule 68 offer of judgment renders the individual plaintiff’s claims moot.” The court remanded for consideration whether Sandoz timely sought certification of her collective action.
I like the innovation of the 5th Circuit approach and the ways in which avoids the pitfalls of the 11th Circuit approach. Although this sounds like an arcane issue, with the number of FLSA collective actions out there, this could turn out to be an important decisional innovation which compromises nicely the competing employer and employee interests involved.
Color me unsurprised: the Washington Post has a story out today on OSHA's lack of enforcement during the Bush Administration. A major problem appears to be the influence of political appointees at the agency interfering with career scientists' findings. According to the Post:
Current and former career officials at OSHA say that . . . a recurrent feature during the Bush administration [was the fact that] . . . political appointees ordered the withdrawal of dozens of workplace health regulations, slow-rolled others, and altered the reach of its warnings and rules in response to industry pressure.
The result is a legacy of unregulation common to several health-protection agencies under Bush: From 2001 to the end of 2007, OSHA officials issued 86 percent fewer rules or regulations termed economically significant by the Office of Management and Budget than their counterparts did during a similar period in President Bill Clinton's tenure, according to White House lists.
White House officials have dismissed such tallies, emphasizing in recent regulatory overviews that their "objective is quality, not quantity," and that heavy restrictions on corporations harm economic performance. During Bush's presidency, they said in a September report, average annual regulatory costs were kept 24 percent lower than during the previous two decades. OSHA says it has issued many rules of lesser consequence that nonetheless clarified industry responsibilities. . . .
More than two dozen current and former senior career officials further said in interviews that the agency's strategic choices were frequently made without input from its experienced hands. Political appointees "shut us out," a longtime senior career official said. Among the regulations proposed by OSHA's staff but scuttled by political appointees was one meant to protect health workers from tuberculosis. Although OSHA concluded in 1997 that the regulation could avert as many as 32,700 infections and 190 deaths annually and save $115 million, it was blocked by opposition from large hospitals. . . .
The agency's first director under Bush, John L. Henshaw, startled career officials by telling them in an early meeting that employers were OSHA's real customers, not the nation's workers. "Everybody was pretty amazed," one of those present recalled. "Our purpose is to ensure employee safety and health. . . . He just looked at things differently." . . .
In 2006, Henshaw was replaced by Edwin G. Foulke Jr., a South Carolina lawyer and former Bush fundraiser who spent years defending companies cited by OSHA for safety and health violations. Foulke quickly acquired a reputation inside the Labor Department as a man who literally fell asleep on the job: Eyewitnesses said they saw him suddenly doze off at staff meetings, during teleconferences, in one-on-one briefings, at retreats involving senior deputies, on the dais at a conference in Europe, at an award ceremony for a corporation and during an interview with a candidate for deputy regional administrator.
His top aides said they rustled papers, wore attention-getting garb, pounded the table for emphasis or gently kicked his leg, all to keep him awake. But, if these tactics failed, sometimes they just continued talking as if he were awake. "We'll be sitting there and things will fall out of his hands; people will go on talking like nothing ever happened," said a career official, who spoke on the condition of anonymity because he was not authorized to talk to a reporter. . . .
The full article includes numerous examples of health and safety rules being spiked by political appointees--many of whom were in a revolving door of fighting OSHA as corporate representatives, working at OSHA, and then back to the corporate world. A further theme is an increased push to "compliance assistance" and away from enforcement. One thing that has heartened me about Obama's nominations thus far, especially on the energy/environmental side, is that he seems to be placing a renewed emphasis on science. Political decisions must still be made at the end of the day, but those decisions should be made with the benefit of scientific findings--even those that counter the ultimate decision--not by pretending that such findings don't exist. We'll see if the actual administration lives up to this initial optimism.
Saturday, December 27, 2008
It's the time of year to reflect back, and so I'll reflect back on the Supreme Court's most recent conference and the labor and employment petitions that the Court denied. There were five of them (the links are to the appellate court opinions): Alabama v. Pope; Philadelphia v. Lawrence; Phillips v. Gaston County; Bowie v. Personnel Bd. of Jefferson County; and Waris v. Harris County Pub. Health & Environmental Services.
The issue in Pope was whether an individual who wins a civil rights case has a right under federal law to recover attorneys’ fees from someone else who shared in that victory. In the underlying case, the state had eventually taken the side of a white worker who had lost a promotion because of a court-imposed requirement for racial preferences in state employment, and the lower courts had awarded that worker fees from the state on the theory that the worker was a prevailing party. The Eleventh Circuit Court upheld that award against the state of Alabama in a case involving a court-imposed requirement for racial preferences in state employment actions.
The issue in Lawrence involved whether the city of Philadelphia owes back pay for overtime to paramedics who do not regularly fight fire. The case turned on whether those paramedics had "legal authority and responsibility" for fire suppression activities within the meaning of section 203(y) of the FLSA. The Third Circuit Court ruled that the paramedics were primarily medical workers and were not exempted from the overtime pay provision.
In Phillips, the issue involved the standard to be used to determine whether a county police officer employee had a property interest in continued employment under North Carolina law. The Fourth Circuit had held not, but had further affirmed the district court's ruling that the officer was discharged for cause.
In Bowie, the Eleventh Circuit had held that a court appointed receiver in bankruptcy was not an employer for purposes of Title VII (and would also have judicial immunity even if Title VII allowed a person to be individually liable) such that the receiver may not be held liable under Title VII for actions taken by him or her as a receiver.
In Waris, the Fifth Circuit had held that the pro se plaintiff failed to establish prima facie case of race or national origin discrimination in connection with the termination of his employment seven weeks after he was hired as clinic manager for defendant county, because he presented no evidence of disparate treatment and that the district court did not act improperly in declining to exercise supplemental jurisdiction of plaintiff's state law claims once summary judgment was granted on federal claims.
The only one that surprised me was the Pope case. I would have thought that the result in that case would have rubbed the majority of the Justices the wrong way. The others all seem to be relatively narrow issues, not presenting much that is in great controversy at the moment.
Hat tip: Paul Secunda
Friday, December 26, 2008
David Yamada (Suffolk) has just started a new blog, Minding the Workplace. The target audience is folks interested in workplace dignity, bullying, and psychological health topics. Here's a description:
Welcome to Minding the Workplace, the blog of the New Workplace Institute. This blog is dedicated to commentary about work and employment relations, as well as discussing and sharing useful books, articles, media programs, and Internet sources about the workplace.
Welcome to the blogosphere, David!
Wednesday, December 24, 2008
- Raja Raghunath, Stacking the Deck: Privileging “Employer Free Choice” Over Industrial Democracy in the Card-Check Debate, 87, Nebraska L. Rev.329 (2008).
- Nantiya Ruan, Accommodating Respectful Religious Expression in the Workplace, 92 Marquette L. Rev. 1 (2008).
- Scott L. Cummings, Law in the Labor Movement’s Challenge to Wal-Mart: A Case Study of the Inglewood Site Fight, 95 California L. Rev. 1927 (2007).
- Leonard M. Niehoff, Peculiar Marketplace: Applying Garcett v. Ceballos in the Public Higher Education Context, 35 The J.College Univ. L.75 (2008). Butzel Long P.C.
- Joan M. Shepard, The Family Medical Leave Act: Calculating the “Hours of Service” For the Reinstated Employee, 92 Marquette L. Rev. 173 (2008).
- Roberto Concepcion Jr., Organizational Citizenship Through Talent Management: An Alternative Framework to Diversity in Private Practice, 42 Columbia J.L. & Social Problems 43 (2008).
- Adam J. Bernstein, Retaliatory Litigation Conduct after Burlington Northern & Santa Fe Railway Company v. White, 42 Columbia J.L.& Social Problems 91 (2008).
Harold Lewis, Jr. (Mercer) and Thomas Eaton (Georgia) have just posted on SSRN their article The Contours of a New FRCP, Rule 68.1: A Proposed Two-Way Offer of Settlement Provision for Federal Fee-Shifting Cases. Here's the abstract:
Our research began with interviews of experienced attorneys who prosecute and defend civil rights and employment discrimination cases. We set out to determine the extent to which offers of judgment under Federal Rule of Civil Procedure 68 ("FRCP 68" or "Rule 68") are made in these type of cases and the reasons why that Rule is or is not used. We focused on civil rights and employment discrimination litigation because it is in those cases where Rule 68 has the greatest potential to stimulate an early resolution of the dispute. Rule 68 provides the offeror greater leverage in civil rights and employment discrimination cases than in most other types of civil litigation, because the potential sanction to the prevailing offeree who turns down and fails to improve upon the offer includes the forfeiture of post-offer statutory attorneys' fees. And in these cases, fees often constitute the greater part of a plaintiff's recovery.
In this, our second report, we discuss how Rule 68 might be amended to make it a more effective tool for stimulating the prompt and fair resolution of civil rights and employment discrimination actions. Our suggested potential amendments are drawn largely, but not entirely, from two sources: the comments and suggestions made by the attorneys we interviewed, and the practices that have evolved in states that have similar provisions in their respective rules of civil procedure. In very broad terms, we discuss (1) having a separately numbered subdivision of the Rule for cases arising under federal fee-shifting statutes; (2) modifying the terminology of Rule 68 to describe more explicitly the mechanics and sanctions of the Rule; (3) allowing plaintiffs, not just defendants, to initiate offers under a "two-way" rule; (4) devising a set of incentives and sanctions calculated to promote the timely and fair resolution of disputes without unduly threatening either party; and (5) incorporating time frames for making and responding to offers.
Our own Paul Secunda was quoted in today's Wall Street Journal on the Wal-Mart settlement we recently posted on. As Paul notes, one of Wal-Mart's reasons for settling now may be the new political realities in the federal government and the possibility that EFCA or something like it could be passed:
Paul M. Secunda, an associate professor at Marquette University Law School, suggested Wal-Mart wanted to settle the lawsuits not just to avoid potentially more costly defeats in the courtroom, but to resolve issues that might be used to argue for passage of the Employee Free Choice Act. The legislation, expected to be considered by Congress next year, is fiercely opposed by Wal-Mart because the company worries it will make it easier for workers to unionize.
"This is part of their overall strategy to get their labor house in order, and compared to what unionization might cost them, I think they probably realized it was a small price to pay," Mr. Secunda said.
Nice job, Paul!
Tuesday, December 23, 2008
The New York Times, in an article co-authored by Stephen Greenhouse, is reporting that Wal-Mart (who else?) has just agreed to a $352 million or more settlement over off-the-clock claims. We've reported on some previous big Wal-Mart settlements, but this one is huge--and reported to be the largest wage and hour settlement in history. According to the NY Times:
After years of being embarrassed by lawsuits over its wage practices, the company agreed to settle 63 cases pending in federal and state courts in 42 states. The workers and their lawyers will receive at least $352 million, and the payments could reach $640 million, depending on how many claims affected workers submit. . . . The newly settled cases involved hundreds of thousands of current and former hourly employees. It is unclear how much the average employee will receive, but the sum could be several hundred dollars. . . .
The dozens of wage-and-hour suits against Wal-Mart accused the company and its managers of various illegal tactics. Those included forcing employees to work unpaid off the clock, erasing hours from time cards and preventing workers from taking lunch and other breaks that were promised by the company or guaranteed by state laws.
The settlement — which wipes out all but 12 pending wage-and-hour lawsuits against Wal-Mart — also gives the company a cleaner slate as a new administration enters the White House. President-elect Barack Obama has indicated he will make wage-and-hour enforcement a priority, and groups critical of Wal-Mart suggested that the company had reached the settlement to avoid becoming a target of stepped-up enforcement. . . .
The article does a nice job trying to put the settlement in context, including some people's thoughts that the amount isn't as significant as some recent jury verdicts that Wal-Mart has faced. Even if true, this is a real victory for the employees involved. Although it would have been far better if they had gotten paid what they deserved at the time, even a delayed and partial payment is better than nothing and probably much appreciated during these economic times.
Really bad news just in from the Bureau of Labor Statistics:
In November, employers took 2,328 mass layoff actions, seasonally adjusted, as measured by new filings for unemployment insurance benefits during the month, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Each action involved at least 50 persons from a single employer; the number of workers involved totaled 224,079 on a seasonally adjusted basis. The number of mass layoff events in November increased by 188 from the prior month, while the number of associated initial claims decreased by 8,389. Over the year, the number of mass layoff events increased by 999, and the number of associated initial claims increased by 84,408. In November, 874 mass layoff events reported in the manufacturing sector, seasonally adjusted, resulting in 98,408 initial claims. Over the month, mass layoff events in manufacturing increased by 239, and initial claims increased by 11,005, the fourth consecutive over-the-month increase for both.
From the start of the recession in December 2007 through November 2008, the total number of mass layoff events (seasonally adjusted) was 20,712, and the number of initial claims seasonally adjusted) was 2,108,743.
Hat tip: Carol Furnish.
As readers might recall, the Supreme Court case of Metlife v. Glenn from this past basically left the Firestone review standard for denial of benefits alone and held that a conflict of interest that a dual-role insurer has is just one factor to take into account in determining whether the plan administrator abused his discretion in denying benefits to a plan participant or beneficiary.
I predicted back then that this would lead to more ERISA plaintiffs losing their denial of benefit claims under Section 502(a)(1)(B):
Prediction: there will be no uniformity or predictability in these "combination-of-factors method of review" cases and the conservative bent of the lower federal courts will mean that employee participants and their beneficiaries will continue to lose these denial of benefit cases involving dual-role insurers at an alarming rate.
Unfortunately, it looks like I am turning out to be right. Exhibit A: Champion v. Black & Decker (U.S.) Inc., No. 07-1991 (4th Cir. 12/19/08). The Fourth Circuit in Champion found that a woman was properly denied her disability benefits once it no longer modified the standard of review to account for the conceded conflict of interest, and rather found the conflict, under Glenn, to just be “one factor” as part of its deferential review.
At this point, Congress needs to amend the provisions of ERISA concerning review of denial of benefits to put more teeth into the law and to hold claim administrators more accountable for their claim decisions.
Rockwell Automation and its successor companies promised, in a collective bargaining agreement signed with the United Auto Workers, that
The Health Care . . . Coverages an employee has under this Article at the time of retirement or termination of employment at age 65 or older . . . shall be continued thereafter provided that suitable arrangements can be made with the Carrier(s). Contributions for coverages so continued shall be in accordance with [another provision of the CBA].
This contract language, the district court concluded "unambiguously promises lifetime benefits." The defendants appealed, arguing that the following provision of the CBA limits retiree insurance coverage to the duration of the CBA:
This [Insurance] Agreement and [Insurance] Program as modified and supplemented by the [Insurance] Agreement shall continue in effect until the termination of the Collective Bargaining Agreement of which this is a part.
Not so, concluded the Sixth Circuit. General durational clauses such as this refer only "to the length of the CBAs and not the period of time contemplated for retiree benefits." They therefore "cannot trump contractual promises of lifetime retiree healthcare benefits."
As Mitch points out, this is a major case. The Big Three and their myriad suppliers (a large proportion of which are in the Sixth Circuit) are looking to retiree health benefits as one way of cutting legacy costs. Cole takes many of these retirement benefits plans off the table -- at least those plans with contractual language similar to that at issue in Cole.
But retirees shouldn't be popping any corks -- the bottles may be filled with vinegar, for two reasons. First, Cole itself distinguishes an earlier case which had held that a company may not have to pay for retiree benefits if the facility covered by the CBA closes. Second, companies can file for Chapter 11 bankruptcy and walk away from their CBAs as part of the reorganization, as the Northwest Flight attendants case demonstrated a couple of years ago. Cole thus may make plant closings and bankruptcy look more attractive to automakers and their suppliers looking to slash legacy costs.
For more on how companies can use bankruptcy to reject collective bargaining agreements, see my article (with Donald Smith) Reconciling Labor and Bankruptcy Law: The Application of 11 U.S.C. Section 1113, 2001 MSU L. Rev. 1145 (2001).
Four Oklahoma City University law professors submitted a confidential memo to the OCU attorney in October 2007 detailing alleged discrimination and harassment incidents.
It outlines allegations of sexual harassment, pay disparity and insensitivity.
The female professors also complained the OCU law school has no regular civil rights course, criminal law classes don’t cover rape, and the landmark abortion case Roe v. Wade is only covered sporadically in constitutional law.
The memo was sparked by two incidents: the alleged sexual harassment of two female professors at Dean Lawrence Hellman’s home in July 2007 and the all-male panel chosen for a Constitution Day program in September 2007.
"These incidents caused us to summarize and verbalize our longstanding belief that the OCU law faculty exhibit discriminatory attitudes and behavior that are harming and have harmed our professional careers and quality of life,” the women wrote . . . .
The memo notes the lack of women on a faculty appointment committee, which regularly included two university professors who are "openly hostile” to the idea of giving special consideration for women and minorities.
Some interesting questions raised by this memo: does the lack of course offerings, or the coverage of certain topics, evidence gender discrimination? How about if a law school panel or a faculty committee does not contain any female professors? Of course, these questions must be answered in the larger context of the work environment, but they are interesting allegations nonetheless.
Wondering how this "confidential" memo made its way into the news media?
The memo, which is dated Oct. 10, 2007, was included with the Dec. 2 discrimination lawsuit filed in federal court in Oklahoma City by professor Danne Johnson.
Johnson is one of the women responsible for the memo, but the rest of the names in it have been blacked out.
This case has the potential of causing waves in the law school world, so I plan to further updates as they become available.
Hat Tip: Jack Sargent
- Ezekiel J.N. Fletcher, De Facto Judicial Prremption of Tribal Labor and Employment Law, p. 435.
- Vicki J. Limas, The Tuscarorganization of the Tribal Workforce, p. 467.
- Wenona T. Singel, The Institutional Economics of Tribal Labor Relations, p. 487.
- Kaighn Smith, Jr., Tribal Self-Determination and Judicial Restraint: The Problem of Labor and Employment Relations within the Reservation, p. 505.
- Bryan H. Wildenthal, How the Ninth Circuit Overruled a Century of Supreme Court Indian Jurisprudence-And Has so Far Gotten Away with It, p. 547.
Articles from the Second Annual Colloquium of Scholarship in Labor and Employment Law
University of Colorado Law Review
Volume 79, Issue 4, 2008
- Richard Moberly, Protecting Whistleblowers by Contract, p. 975.
- Alex B. Long, Retaliatory Discharge and the Ethical Rules Governing Attorneys, p. 1043.
- Paul M. Secunda, Whither the Pickering Rights of Federal Employees?, p. 1101.
- Ann C. McGinley, Creating Masculine Identities: Bullying and Harassment 'Because of Sex', p. 1151.
- Michael J. Zimmer, A Chain of Inferences Proving Discrimination, p. 1243.
- Jessica L. Roberts, Accommodating the Female Body: A Disability Paradigm of Sex Discrimination, p. 1297.
- Matthew T. Bodie, Mother Jones Meets Gordon Gekko: The Complicated Relationship Between Labor and Private Equity, p. 1317.
- D. Wendy Greene, Title VII: What's Hair (and Other Race-Based Characteristics) Got to Do with It?, p. 1355.
Monday, December 22, 2008
If you are a hard-core political junkie and/or a numbers freak, you're probably already well-acquainted with the website, fivethirtyeight.com. It's the brainchild of baseball numbers nerd (I say that as complementary as possible) Nate Silver, whose regression-based prediction for the presidential race this year was eerily on target. Although a bit outside his number-crunching expertise, he has an interesting post on the potential votes for EFCA in the Senate--focusing in particular on the need for cloture to shut down an expected filibuster (I'll forgive him for describing EFCA as "seemingly obscure"):
[T]he margin of error between the passage and failure of the bill in the Senate is going to be very, very thin.
In 2007, 51 senators voted for cloture on EFCA -- all Democrats except Tim Johnson, who was still absent from the Senate at that time, plus a lone Republican, Pennsylvania's Arlen Specter. That left the Democrats 9 votes short of passage -- votes which, in theory, they might now have. Johnson is back in the Senate, and they have picked up seats in Alaska, Colorado, New Hampshire, New Mexico, North Carolina, Oregon, Virginia, and are on the verge of doing so in Minnesota. That would give them 60 votes and 60 exactly, if and when replacement senators are appointed in Illinois, Colorado and New York.
Except that, Democrats are in danger of losing at least one vote: Arkansas' Blanche Lincoln, who has suggested that she is "undecided" on the measure. Arkansas has very low union participation: between its manufacturing and construction sectors, 6.0 percent of its workforce participates in unions, about half the national average. . . .
[If the Democrats] lose Lincoln, then [keeping] Specter only gets the Democrats to 59. Are there any other Republicans who might flip? Three others -- Ohio's George Voinovich, and Maine's Susan Collins and Olympia Snowe -- have received at least $100,000 in union contributions since 2003. Another wild card might be Alaska's Lisa Murkowski; Alaska is a highly unionized state, and the unions have sometimes been supportive of her. If Sarah Palin decides to run against her in 2010, Murkowski will need substantial support from union members to have a chance of defending her seat. Still, all four voted against cloture when the bill came up in 2007, and if Obama's coattails would ordinarily be worth something, that momentum is mitigated by the loss of face that the unions suffered on the auto bailout, when the UAW's public relations effort when nightmarishly.
Most likely, then, the Democrats will need to hold both Lincoln and Specter, as well as win the seat in Minnesota. If any of these contingencies fall through, EFCA faces an uphill battle.
This analysis may be overly optimistic. I'm still not convinced that all Democrats will get on board. Depending on how strongly the Obama Administration pushes EFCA and whether it's brought as a stand-alone bill, there could be more Democratic defections. Stay tuned.
The Washington Post has two recent pieces on the UAW and the recent automakers bailout, with the theme in both centered on the union's declining relevance. I think both are a bit too down on the UAW, as the union has done a pretty good job handling some very tough economic realities over the past few years (as the Warren Brown piece notes, "despite claims to the contrary in White House and Capitol Hill bailout chatter, the UAW repeatedly has taken pay and benefits cuts to help the companies stay in business."). But those harsh realities are significant for the labor movement in their own right.
The first article examines whether the White House bailout plan negates any purpose for the UAW:
The language of the loan agreement sets specific "restructuring targets" that General Motors and Chrysler must use their "best efforts" to meet. Compensation must be made "competitive" to that of nonunion workers, and work rules must be "competitive" with those at nonunion plants. The companies also must reduce compensation to workers who have been laid off -- the jobs bank -- and at least half of the company's payments into retiree health care must be made in stock, not cash. If the companies fall short of those targets, they are required to explain why. The payment in stock makes the health fund more risky. The wage concessions could force average wages down to $24 an hour from $28 an hour, analysts said. . . .
Those and other concessions would essentially erase the significant distinctions between union and nonunion auto workers, and the lack of such union worker advantages would render moot the union's fundamental purpose, some industry analysts and labor experts said.
In the second piece, Warren Brown strikes a similar chord:
The UAW's failure to organize foreign rivals in America has undermined the value of the union's employment agreements with Detroit. As long as workers at nonunion companies receive lower pay than their counterparts at UAW-represented rivals, the union will be under pressure to make concessions at the bargaining table.
The federal bailout loan agreement greatly increases that pressure. The money will help the companies, which long ago began an aggressive restructuring of their operations. But its terms of agreement mean that the UAW will have to live with less, which means that nonunion workers will be asked to live with the same thing.
In some ways, this situation is unique in that the Detroit automakers have had a particularly bad business model long before the economic crisis began. The automakers' problems have to hit the UAW, no matter what the union does. On the other hand, despite factors unique to the auto industry, the UAW's troubles reflect in part the difficulty of our traditional collective bargaining model in a more globally competitive economy. Whether and to what extent unions and labor law can adjust is still an open book (shameless plug: I've written some on this topic with my father, and many others have as well).
Hat Tip: Dennis Nolan